By Kanishka Ajmera

(Reuters) U.S.-listed shares of Arm Holdings jumped nearly 12% in premarket trading on Wednesday after the chip ‌firm projected billions of dollars in annual revenue from its ‌own new artificial intelligence data-center chip.

The new chip marks a pivot for Arm, which has ​traditionally relied on licensing its designs to companies such as Nvidia and Qualcomm and then collecting a royalty payment based on the number of units sold.

Unlike current chips that are designed to respond to queries as part ‌of a chatbot, Arm's ⁠AGI CPU will be able to handle data-crunching needs of "agentic AI", a system that acts on behalf of users ⁠with minimal oversight.

Arm expects the data-center chip to generate roughly $15 billion in annual revenue in about five years, CEO Rene Haas said in an ​interview with ​Reuters.

Overall, the company expects to generate ​revenue of $25 billion in that ‌period, and annual earnings of $9 per share, he said.

"Arm has not taken a baby step, say the production of a die or a chiplet for its customers; it has jumped in with both feet, developing the highly performing and energy efficient Arm AGI CPU," Citigroup analysts ‌said.

"The industry move to inference and, in ​particular, agentic AI is showing the need ​for more CPUs."

The rise of "agentic ​AI" has already fueled stronger demand for similar chips, ‌which are manufactured by companies like ​Intel and Advanced ​Micro Devices.

Shares of Intel were up 3.4%, while AMD rose more than 1%.

Arm is trading at 63.08 times analysts' estimates for ​the company's earnings for ‌the next 12 months, compared with AMD's 26.64 and Intel's ​71.27, according to data compiled by LSEG.

(Reporting by Kanishka Ajmera ​in Bengaluru; Editing by Leroy Leo)

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